The United States government has launched an inquiry into Google’s $1 billion purchase of Waze, a popular mobile mapping and traffic application, according to multiplereports, in the latest regulatory headache for the Silicon Valley tech titan. The Federal Trade Commission’s inquiry, which is still in a preliminary stage, is not a surprise, because after the deal was announced, industry experts pointed out that Google’s own maps product is among the market leaders, raising potential antitrust concerns.

Earlier this month, Google announced that it had closed a $1 billion deal to acquire Waze, an Israeli company that has built an innovative mobile mapping product that crowd-sources user data to help drivers avoid traffic congestion, road construction and police speed traps. The deal was seen, in part, as a defensive play to remove a competitor to Google Maps, and keep the service out the hands of rival tech giants Apple and Facebook, which had also been circling the company.

Google’s acquisition of Waze was initially able to avoid antitrust scrutiny, because Waze’s assets and sales fell below the $70.9 million threshold required to trigger a so-called Hart-Scott-Rodino antitrust review. Nevertheless, the deal could still be unwound by U.S. authorities under the Clayton Antitrust Act, according to Glenn Manishin, a partner at the law firm Troutman Sanders and a leading antitrust expert. If the government concludes the deal is anticompetitive or violates antitrust law, Google could be compelled to divest Waze.

Reached by TIME, a Google spokesperson confirmed that the company had been contacted by the FTC regarding the Waze acquisition, and referred further questions to the FTC. The FTC declined to comment. The FTC’s review was first reported by the New York Post.

Four-year-old Waze is a free application currently available on the iPhone and Google Android devices, which incorporates real-time GPS data from its nearly 50 million users to deliver highly accurate and useful traffic and navigation information. Waze users can edit maps with details like gas prices, speed traps, road construction and traffic accidents. Google and Apple have been fighting an increasingly intense battle in the map app space, which has become a crucial battleground in the war for smartphone supremacy.

Consumer Watchdog, a California-based advocacy group, has urged federal regulators to closely scrutinize the Waze deal. “Google already dominates the online mapping business with Google Maps,” John M. Simpson, Consumer Watchdog’s privacy project director, wrote in letters to the FTC and the Justice Department. “Now with the proposed Waze acquisition the Internet giant would remove the most viable competitor to Google Maps in the mobile space.”

Simpson pointed out that last year, Waze CEO Noam Bardin described his company as the only viable competitor to Google Maps. “We feel that we’re the only reasonable competition to [Google] in this market of creating maps that are really geared for mobile, for real-time, for consumers — for the new world that we’re moving into,” Bardin said at a technology conference in comments cited by Forbes.

One of the crucial tasks facing antitrust regulators as they scrutinize the Waze deal is to define the “relevant market,” in order to determine if there are anti-competitive dynamics present, according to Manishin. Is the relevant market smart phone map applications, a space dominated by Google and Apple? Or is it the broader turn-by-turn navigation market, which would include dash-mounted and other types of automobile GPS units, such as those made by TomTom and Magellan.

If regulators determine that the relevant market is for broader turn-by-turn navigation technology, Google stands a better chance of holding on to Waze. “Since that market features a variety of strong companies, including Telenav and TCS (which power AT&T and Verizon navigators respectively), it is unlikely for antitrust regulators to block the merger on the grounds of its concentrating effect,” Daniel O’Connor, Senior Director for Public Policy at the Computer and Communications Industry Association, wrote in an antitrust analysis of the deal.

On the other hand, the deal could still run into trouble if regulators determine that Google is trying to remove a “disruptive” or “maverick” challenger from the marketplace, according to O’Connor. “If one of the merging firms has a strong incumbency position and the other merging firm threatens to disrupt market conditions with a new technology or business model, their merger can involve the loss of actual or potential competition,” according to section 2.1.5 of the Justice Department’s Horizontal Merger Guidelines.

“Is Waze’s social mapping business model one that might undercut Google’s revenue stream, which the latter would like to mothball?Or is it likely that Google will integrate the best of its own mapping features (and advertising business models) with Waze to create a better, more competitive product. If regulators believe the answer to be the former, they would probably attempt to unwind the merger. If regulators think the latter is more likely, they would have no problem with the merger.”

Google has said it intends to keep Waze as an independent app, though it could incorporate some of its features into Google Maps, and vice-versa.

The FTC’s inquiry into the Waze deal comes just months after Google agreed to make voluntary changes to its search business in order to avoid a major federal antitrust lawsuit into whether it uses its search-market power to harm rivals. Several of Google’s competitors, including Microsoft and Yelp, had argued that Google unfairly demoted rivals in its search results in order to steer users toward Google’s competing products. But the FTC ruled unanimously that it lacked sufficient evidence to charge Google with antitrust violations.

Given Google’s market power in Web search, smart phones, and other areas of the online economy, it’s no surprise that the tech titan appears to be under near-constant scrutiny by U.S. authorities and well as foreign regulators, particularly in Europe. For the most part, Google has managed to avoid any major regulatory sanctions or penalties. Now that the U.S. is examining its Waze deal, however, time will tell whether Google’s luck has finally run out.